NY Fed publishes report on digital assets payments system

The Federal Reserve Bank of New York’s New York Innovation Center Thursday published a report on the feasibility of an interoperable network for wholesale payments operating on a shared multi-entity distributed ledger.

The project experimented with the concept of a regulated liability network (RLN) and was conducted in collaboration with members of the financial services sector, including banks and payments processors such as Mastercard, Wells Fargo, Citi, and others.

The proof of concept (PoC) looked at the technical feasibility, business applicability, and legal viability of using shared ledger technology to settle the liabilities of regulated financial institutions using tokenized deposits issued by commercial banks and wholesale central bank digital currency (wCBDC) as a settlement asset.

A report investigating the legal feasibility of the RLN infrastructure noted that “the public would have no ability to acquire or transact in the deposit tokens except through a deposit relationship with a bank and a wallet hosted by that bank.” The report stated that additional analysis and engagement with federal regulators would be required before final conclusions could be reached; however, the press release noted that “the legal workstream did not identify any insuperable legal impediments under existing U.S. legal frameworks that would prevent the establishment of an RLN system as contemplated in the PoC.”


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